2 The budget director of Royal Furniture Company requests estimates of sales, pr

Question

2 The budget director of Royal Furniture Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for for February 2014 is summarized as follows: a. Estimated sales of King and Prince chairs for February by sales territory: Northern Domestic: Prince . ..........750 units at $550 per unit Southern Domestic: Prince International: ....340 units at $780 per unit 440 units at $550 per unit ..290 units at $600 per unit Prince .44NHACNE.... b. Estimated inventories at February 1: UHHONA Direct materials Finished products Fabric Wood Filler …). Springs. 420 sq. yds 580 linear ft 250 cu. ft 660 units King Prince HD 90 units R25 units c. Desired inventories at February 28 Direct materials: Finished products: FabricR Wood RE390 sq. yds. King P Prince 80 units 35 units 650 linear ft 300 cu. ft. 540 units Springs d. Direct materials used in production: In manufacture of King Fabric Wood Filler Sprinas 6.0 sq. yds per unit of product 38 linear ft. per unit of product 4.2 cu.ft.per unit of product 16 units per unit of product llShe Sheet3 Mac

Explanation / Answer

1 Sales Budget for February King Prince Total Sales King Prince King +Prince Unit Price TotalSales Unit Price Total Sales Northern Domestic 610 $780 $475,800 750 $550 $412,500 $888,300 Southern domestic 340 $780 $265,200 440 $550 $242,000 $507,200 International 360 $850 $306,000 290 $600 $174,000 $480,000 1310 TOTAL $1,047,000 1480 TOTAL $828,500 $1,875,500 2 Production Budget for February King Prince A Month Beginning Inventory 90 25 B Sales 1310 1480 C Month end inventory 80 35 D=B+C-A Production 1300 1490 3 Direct Material required for production in February King Prince Total Per unit Total units Per Unit Total units Requirement A B=A*1300 C D=C*1490 Fabric(sq.Yards) 6 7800 4 5960 13760 Wood(linear feet) 38 49400 26 38740 88140 Filler(Cu.feet) 4.2 5460 3.4 5066 10526 Spring(units) 16 20800 12 17880 38680 TOTAL 4 Direct Material Purchase budget for   February A B C D=C+B-A Beginning Ending Requirement Purchase Price Purchase Inventory Inventory for Feb. Quantity Dollar Fabric(sq.Yards) 420 390 13760 13730 $12 $164,760 Wood(linear feet) 580 650 88140 88210 $7 $617,470 Filler(Cu.feet) 250 300 10526 10576 $3 $31,728 Spring(units) 660 540 38680 38560 $4.50 $173,520 5 Direct Labor Cost budget for   February King Prince A B C=A*B D=C*1300 E F G=E*F H=G*1490 Hours Rate($/hour) Unit cost Total cost Hours Rate($/hour) Unit cost Total cost Framing department 1.2 $12 $14.40 $18,720 1 $12 $12 $17,880 Cutting department 0.5 $14.00 $7.00 $9,100 0.4 $14.00 $6 $8,344 Upholstery department 0.8 $15 $12.00 $15,600 0.6 $15 $9 $13,410 TOTAL $33.40 $43,420.00 Total $26.60 $39,634 6 Unit Costs King prince Unit Direct labor cost $33.40 $26.60 Direct Material Cost King Prince Units Rate Cost Units Rate Cost Fabric(sq.Yards) 6 $12 $72 4 $12 $48 Wood(linear feet) 38 $7 $266 26 $7 $182 Filler(Cu.feet) 4.2 $3 $13 3.4 $3 $10 Spring(units) 16 $4.50 $72 12 $4.50 $54 Total $423 Total $294 King Prince Unit Direct material cost $423 $294

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